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Last Updated : Jan 16, 2013 11:31 AM IST | Source: CNBC-TV18

Nifty may touch 6150; bet on large caps, pharma: Edelweiss

After touching the psychological 20,000 mark on the Sensex during early trade on Tuesday, the Nifty too crossed an important resistance level of 6050.


After touching the psychological 20,000 mark on the Sensex during early trade on Tuesday, the Nifty too crossed an important resistance level of 6050. Atul Badkar, VP, Institutional Equities at Edelweiss Securities believes the market is set for another 100 points of gain as the Nifty moved past the 6000 mark comfortably yesterday. He is looking at 6150 as the next target for the NSE benchmark.


Also read: Q3 earnings: Religare positive on IT, cautious on telecom


At the moment, Badkar believes large caps and semi-defensives remain good bets along with some pharma and consumer names. He picks Cipla as a positional bet with a prospect of a 8 to 10 percent upside. "Cipla is slightly a longer term call, not immediately over the next four or five days but maybe we can achieve this target in the next three to four weeks," he explained.


Badkar is also in favour of the telecom stocks and added that Bharti may move up 3 to 5 percent. Among the rate sensitives, he feels ICICI Bank looks positive and if the Nifty moves between 6050 and 6150, it may offer a 5 to 6 percent gain.


Here is the edited transcript of the interview on CNBC-TV18.


Q: How are you guys mapping the rest of the series for the Nifty?


A: We pretty much maintain our view as we mentioned even last time that 6050 was a very important resistance that we were watching out for a while and 5950 is like the 21 day Exponential Moving Average (EMA) which has been taking a very strong support repeatedly. Since we have just managed to cross 6050 yesterday, I think another 100 points is on the cards.


One thing we very clearly saw is that there is underlying strength on the index. The FII figures are fantastic. In the first 15 days of January you had more than Rs 10,000 crore of foreign money flowing in. This is still liquidity driven. However, at this point of time you would not want to go and take any aggressive long positions even in the interest rate sensitives, even if you have to maintain very, very strong stop losses.


But, I think it is just safer to be with large caps, semi-defensive kind of names, maybe some in pharma and to a certain extent even consumer names. By and large I think 6150 is where our next target is and I think it will slowdown after that. I do not see this market running away post the all-time highs that easily. We got about 8 or 10 trading sessions to go for the rest of the month. I will call it a top at around 6200 at best, but I think it will still be very range driven with 5950 being a very strong support.


Q: Would you play a long on any of the telecom faces after yesterday’s 5 to 8 percent rally?


A: Yesterday’s move was quite honestly surprising to a lot of us. Having said that, I think in that entire pack, Bharti looks quite strong. From current levels at around Rs 345, this stock can get you around Rs 360-370 quite easily. After Idea’s move yesterday, I will be careful taking any fresh longs in that immediately, simply because even on fundamentals we think that this is a bit overvalued.


On charts it has given you a breakout, but I think yesterday’s move does not really compel me to take any fresh longs in that name. I would ideally book profits in Idea. You will not see a correction in Bharti that easily, which will be about 5 or 7 percent in a day, it is quite rear for that to happen, so it is sort of a semi-defensive stock to be in. After yesterday’s move I think Bharti looks good for a 3 to 5 percent upside.


Q: From that lot, the one that you have picked is ICICI Bank.


A: Although, I mentioned earlier that on interest rate sensitives you will not want to take any aggressive long positions at this point of time, ICICI Bank has closed above Rs 1,200 mark and it is one chart that is looking quite interesting. That can give you that quick 5 or 6 percent, if the market was to move between 6050-6150.


So that is the best trading bet from the entire banking space which is why ICICI Bank at this point of time looks interesting. Having said that, I would not ask you take up a long position immediately as soon as market opens, just watch the first half and if the market sustains that 6050 level and above, I think ICICI Bank makes sense to go long for.


Q: You have got a short call on Mahindra & Mahindra (M&M) this morning?


A: In M&M, we have observed in the last few trading sessions, in fact from the starting of January that the open interest has more or less remained the same and it is stuck in that band of around Rs 920-930. I think at this level technically, it looks quite weak. We think we can short the stock with a target of around Rs 890 or Rs 880.


In the entire auto pack M&M looks like a short and on the other hand, Maruti looks like another 4 to 5 percent upside. It has just been showing a lot of inherent strength. So we are primarily looking at this pair in the auto pack.

Q: From pharmaceuticals Cipla looks like a tradable bet?

A: We are quite bullish on Cipla fundamentally. We think the results will be quite good and even on charts it is showing you some sort of a good support at its current level.  We think that as a positional bet, not as a trading bet, Cipla can give you a good 8 to 10 percent upside. So Cipla is slightly a longer term call, not immediately over the next four or five days but maybe we can achieve this target in the next three to four weeks.



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First Published on Jan 16, 2013 11:15 am
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